CEOs claim stablecoins add strength to the US dollar in US Congress hearings

CEOs claim stablecoins add strength to the US dollar in US Congress hearings. The U.S. Congress held a hearing on crypto assets today and heard testimony from the most prominent CEOs in the industry.

Crypto CEOs defend

The hearing was held by the House Financial Services Committee of the United States Congress. The committee is headed by the representative Maxine Waters (D-CA) with the topic “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States”.

During the congressional hearing Live streaming The CEOs of top crypto companies on YouTube include Jeremy Allaire, CEO of Circle (USD Coin), Brian Brooks, CEO of Miner Bitfury, Charles Cascarilla, CEO of Paxos, Alesia Haas, CTO of Coinbase, Sam Bankman-Fried, CEO of FTX, and Denelle Dixon, CEO of Stellar.

A much discussed topic are stablecoins or tokens that are linked to traditional currencies such as the US dollar.

The topic is directly relevant for several executives: Circle and Coinbase are responsible for the stablecoin USD Coin (USDC), while Paxos is responsible for its own Paxos Dollar (USDP).

Allaire and Brooks emphasize competition

Circle CEO Jeremy Allaire argues that stablecoins can help the US dollar dominate the world instead of harming it.

Allaire argues that independent U.S. stablecoins will dominate the crypto market even if competitive alternatives such as the central bank-developed digital yuan emerge.

While dollar-denominated have made “trillion dollars in transactions,” the Chinese digital yuan has only “made 10 billion dollars in transactions,” commented Allaire.

He stated that the US crypto industry wants the dollar to play an important and strategic role, so supporting US stablecoins should be “a national security priority” for managers.

Bitfury CEO Brian Brooks and the former chairman of the US Bureau of Auditors (OCC) agreed with Allaire in his testimony. At a time of rising inflation, stablecoins could help turn the US dollar into a utility and “more than just a post-WWII monetary system”.

Brooks endorses US stablecoins, arguing that their online nature will allow the dollar to “compete for features, not just history”.

Others discuss the safety of stablecoins

Allaire argues that stablecoins offer security. He found that the assets that back stablecoins are “safer than dollars in a bank account because dollars are held in reserve and lent at a certain price.” This carries more risks to the US economy than stablecoins.

Paxos CEO Charles Cascarilla also demonstrated the security of stablecoins. Cascarilla addressed concerns about a bank caused by stablecoins, claiming that stablecoins are “backed by money in an FDIC-insured bank account or money in treasury bills.”

“So there is no risk of escape. It’s liquid cash and you need to tokenize a dollar. Such properties are very useful, ”explains Cascarilla.

In response to criticism that stablecoins may be ripe for illegal activity, FTX CEO Sam Bankman-Fried countered:

“Advanced guidelines have been put in place and the digital asset industry has a fairly strict standard for KYC / AML procedures.”

Other CEOs, including Alesia Haas and Denelle Dixon, discussed how stablecoins can help non-banks.

They also suggest that regulators need more clarity, a point that is in line with Coinbase’s recent proposal for a directive, which suggests creating a new regulatory framework.

Positive reception

The majority of committee members who spoke during the hearing supported the idea of ​​not stifling innovation in the crypto space. While some questions arise about how regulators can ensure investor protection, the overall outcome of the discussion is positive and encouraging for the crypto space.

Jake Chervinsky, a well-known cryptocurrency attorney and chairman of the Blockchain Association, commented on the hearing by calling it “the most positive, constructive, and non-partisan public event on money.”

Congressman Patrick McHenry has called the crypto sector the “next generation of the Internet”. He added that the US Congress must work together impartially to regulate the growing sector.

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